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Shares in Commonwealth Bank of Australia are getting whacked this morning after the country’s biggest lender flagged a decline in net interest margin during its third quarter, taking the shine off an in-line profit.

Interim results from the major Australian banks this month have, in general, been met with a poor investor reaction, driven by concerns that net interest margins – a key indicator of profitability measuring the difference between the price a bank pays for funds and the price it receives for lending – are on the slide.

CBA booked cash earnings (a preferred profit measure for banks in Australia) of A$2.4bn ($1.8bn) for the quarter ended March 31, a 3 per cent rise from the December quarter. The lender is the only one of Australia’s four major banks to have a June 30 balance date and thus issues a trading update when its peers are delivering their half-year results.

However, it also said the group’s NIM was “slightly lower in the quarter” owing to higher competition. Growth in its key home lending portfolio remained solid, while business lending growth was subdued overall.

Shares were down 2.5 per cent in morning trade in Sydney, lining the bank up for its biggest one-day fall since the Brexit vote in June last year. Shares had been off by as much as 2.9 per cent earlier on Tuesday.

Among peers, Westpac was down 2.4 per cent, ANZ Banking Group was off 2.1 per cent and National Australia Bank was down 1.6 per cent. Losses for the heavyweight banks were being offset by gains for materials and energy stocks, with the benchmark S&P/ASX 200 0.4 per cent lower today.